Why CoreWeave Stock Collapsed 25.4% This Week

Core Points - CoreWeave's stock dropped 25.4% following its Q3 earnings report, reflecting investor concerns despite the company's rapid growth [1][2] - The company reported over 100% year-over-year revenue growth, reaching $1.36 billion, and has a backlog of $55 billion from long-term contracts with major AI firms [3] - CoreWeave's operating margin was only 4%, and it reported a negative free cash flow of $8 billion over the past year, indicating significant cash burn as it invests in AI infrastructure [4][9] - Management's full-year revenue guidance of $5.05-$5.15 billion fell short of analyst expectations, contributing to the decline in stock price [5] - Despite a market cap of $38 billion and a substantial backlog, the company's slim profit margins and high debt levels make it a risky investment [7][8]